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This publication is available at https://www.gov.uk/government/publications/get-your-business-ready-for-the-plastic-packaging-tax/further-information-for-businesses
This guidance gives further information on Plastic Packaging Tax to help businesses prepare.
The primary legislation is in law and forms Part 2 of the Finance Act 2021. Secondary legislation will be introduced later in the year. Until the secondary legislation becomes law, the contents of this guidance are subject to change.
More guidance will be published later in the year.
The packaging categories and definitions used in Plastic Packaging Tax differ from other existing packaging related legislation. You must continue to comply with all regulatory requirements for plastic packaging in other legislation.
Plastic Packaging Tax will be a tax on plastic packaging manufactured in, or imported into the UK, where the plastic used in its manufacture contains less than 30% recycled plastic. Where 30% or more recycled plastic is used, no tax will be due, but the plastic packaging will still need to be accounted for.
The tax will come into effect from 1 April 2022. The rate of tax will be £200 per metric tonne of plastic packaging.
Read the overview of how to get your business ready for Plastic Packaging Tax.
2. Plastic packaging that is chargeable for the tax — key definitions
Plastic Packaging Tax will be due on finished plastic packaging components manufactured in, or imported into the UK in which less than 30% of the plastic is recycled plastic.
This includes imports of packaging which already contain goods, such as plastic bottles filled with drinks. Where the packaging you import already contains other goods, the tax only applies to the plastic packaging itself.
Plastic includes bioplastics, including biodegradable, compostable and oxo-degradable plastics.
2.2 Packaging components
A packaging component is a product that is designed to be suitable for use, whether alone or in combination with other products, in the containment, protection, handling, delivery or presentation of goods at any stage in the supply chain of the goods, from the producer of the goods to the consumer or user.
If the packaging component meets the definition, it does not matter if it is produced or imported for use in the supply chain of the goods, or by a consumer or user.
Examples of packaging components include plastic:
- trays designed to contain and protect food once filled, like a ready meal tray
- film designed to protect produce, like film around raw meat or film sold to consumers
- pots designed to handle and deliver products, like yoghurt and soup pots
- wrap designed to group products together to enable easier handling, like shrink wrap around canned goods
- labels designed to present the goods and describe the contents of a product
- reusable plastic crates designed to deliver fresh fruit or baked goods
If your plastic packaging components are captured by this definition and is not covered by one of the categories of products not chargeable for Plastic Packaging Tax you will need to account for Plastic Packaging Tax.
If your plastic packaging components are not captured by this definition, but are designed as single use consumer packaging they are chargeable and you will still need to account for Plastic Packaging Tax.
Single use consumer packaging
You will need to account for Plastic Packaging Tax if your products are designed as single use packaging for use by a consumer or user in containing any commodity or waste.
- plastic bags including:
- carrier bags
- bin liners and refuse sacks
- sandwich bags
- nappy sacks
- disposable cups including:
- expanded polystyrene cups
- vending machine cups
- plastic wine or pint glasses
- party cups
2.3 Packaging containing multiple materials
Packaging that is made of multiple materials but contains more plastic by weight than any other single substance will be a plastic packaging component for the purposes of the tax. A list of other substances will be provided in regulations later this year.
For example, if a 10 gram packaging component is made of 4 grams of plastic, 3 grams of aluminium and 3 grams of cardboard, all 10 grams will be considered plastic packaging for the purposes of this tax.
Likewise, if the 10 gram packaging component was 3 grams of plastic, 4 grams of aluminium and 3 grams of cardboard, none of the item would be taxable. If the weight of plastic in the component is equal to the weight of another single material used, the component would not be considered as plastic for this tax.
You will need to be able to demonstrate to HMRC if a packaging component which contains plastic is not subject to the tax because it does not contain more plastic than any other material when measured by weight.
If you cannot demonstrate this, the component will be treated as entirely plastic. You must record all the materials used in the packaging component, and the weight of each material, to demonstrate that plastic is not the main material overall and the packaging is not chargeable for the tax.
Businesses must calculate the proportions of recycled plastic content based on single specifications of products manufactured continuously on a production run. All packaging should be uniform in weight (within processing variances and production tolerances) and recycled plastic content calculated as an average across the output.
2.4 Finished packaging component
A plastic packaging component is chargeable for Plastic Packaging Tax when it’s finished. A component is finished when it has undergone its last substantial modification.
This applies even if waste or surplus material remains attached to it, however this is not treated as part of the finished component when calculating the amount of tax due.
If your business is in the UK, you will be liable as a manufacturer for Plastic Packaging Tax if you perform the last substantial modification before the packing or filling process.
Where a substantial modification is undertaken as part of the packing or filling process it should be ignored for the purposes of determining when a component is chargeable for Plastic Packaging Tax. In these cases, the business that undertakes the last substantial modification before the packing or filling process will be liable for the tax.
Therefore, if you pack or fill the packaging, you will only be liable for Plastic Packaging Tax if you also undertake a substantial modification before the packing or filling process.
If your business imports plastic packaging components which have already undergone their last substantial modification, they will be considered finished, and you will be liable for Plastic Packaging Tax.
The last substantial modification is the last manufacturing process that makes a significant change to the nature of the packaging component, as it alters one of the following characteristics of the packaging component:
Not all manufacturing processes are substantial modifications.
Examples of manufacturing processes that are substantial modification processes
This list is not an exhaustive list.
Extrusion is when the raw material is pressed through a die to form the required shape, sheets of plastic and blown film can be made in this way.
Moulding is when plastic is moulded into a certain shape, bottle lids and bottle preforms can be made in this way.
Layering and laminating
Layering and laminating is when 2 or more layers are bonded together, labels can be made in this way.
Forming is when a sheet of plastic is shaped into packaging by being heated and shaped, including thermoforming and vacuum forming. Pots, tubs and trays can be made in this way.
This does not include blowing or forming a packaging component from a preform.
Printing is when ink is applied to plastic, usually to provide detail about what will be going in the packaging.
Examples of manufacturing processes which are not substantial modification processes
Not all manufacturing processes that change the shape, structure, thickness or weight are a substantial modification.
The following processes are an exhaustive list of manufacturing processes which are not substantial modification processes:
- blowing or otherwise forming a packaging component from a preform — for example, blowing bottle preforms into bottles
- cutting — for example, cutting film to size or cutting formed trays out of a larger sheet
- labelling — for example, gluing a label to a tub or heating a shrink film label onto a bottle
- sealing — for example, attaching a film lid onto a tub or attaching 2 sides of a piece of film to close a bag
If several manufacturing processes are completed at the same time
Multiple processes can be completed at the same time to finish a packaging component.
In these cases, the liability for Plastic Packaging Tax remains with the business that completes the last substantial modification of a packaging component before the packing or filling takes place.
If you complete multiple processes to finish a packaging component, and at least one of those processes is a substantial modification process, then all other processes carried out at the same time will be regarded as the last substantial modification.
This includes where any of the other processes would not otherwise be regarded as substantial modifications.
2.5 Recycled plastic
Recycled plastic is plastic that has been reprocessed from recovered material, by using a chemical or manufacturing process, so that it can be used either for its original purpose or for other purposes. This does not include organic recycling.
2.6 Recovered material
Recovered material is pre-consumer plastic or post-consumer plastic that has been collected and recovered as a material input, instead of new primary material, for a recycling or manufacturing process.
It would otherwise have been disposed of as waste or used for energy recovery.
2.7 Pre-consumer plastic
Pre-consumer plastic is plastic that is recovered from waste generated in a manufacturing process and processed by a reprocessing facility. It does not include plastic that is reused in the same process in which it was generated as scrap and from which it was recovered.
2.8 Post-consumer plastic
Post-consumer plastic is plastic that is generated by households or commercial, industrial or institutional facilities in their role as end user of the product that can no longer be used for its intended purpose.
This includes returns of materials from the distribution chain.
3. Plastic packaging not chargeable for the tax
There are several types of product where Plastic Packaging Tax will not be charged regardless of how much recycled plastic the packaging contains.
There are 3 categories of products which are not chargeable because they are specified in the law as not being classed as a packaging component for the purpose of the tax even though they fall within the general definition.
These are items:
- where the packaging function is secondary to the storage function
- where the packaging is an integral part of the goods
- designed primarily to be reused for the presentation of goods
There are 4 types of products which are classed as plastic packaging for the purpose of the tax but are exempted from being chargeable by the law.
These are plastic packaging components:
Used as transport packaging on imported goods.
Used in aircraft, ship and rail goods stores.
Used in the immediate packaging of a medicinal product.
That are permanently designated or set aside for use other than for a packaging use.
You must still include 3 and 4 when assessing whether you meet the 10 tonnes threshold of plastic packaging in a 12 month period for determining if you need to register for the tax even though the tax is not chargeable on these.
Plastic packaging components which are exported from the UK may benefit from relief from Plastic Packaging Tax.
3.1 Plastic packaging where the packaging function is secondary to the storage function
Plastic Packaging Tax is not charged on plastic packaging where the packaging function is secondary to the storage function.
This is packaging designed to be suitable to contain goods at the time of sale to the consumer or user, where the products role as packaging of the goods, is secondary to its use by the end consumer, to contain, support or preserve the goods throughout their lifetime.
- first aid boxes
- earphone or earbud cases
- manicure sets
- glasses cases
- CD, DVD and video game cases
- board game boxes
3.2 Plastic packaging where the packaging is an integral part of the goods
Plastic Packaging Tax is not charged where the packaging is an integral part of the goods.
This is packaging designed so that the packaging is an integral part of the goods and are necessary to enable the goods to be used by the consumer or user.
Once the goods have been used or consumed the packaging is discarded.
- water cartridge filters
- printer or toner cartridges
- tea bags
- room deodorisers
- perforated rice bags
- dental floss cases
3.3 Plastic packaging where the packaging is designed primarily to be reused for the presentation of goods
Plastic Packaging Tax is not charged where the plastic packaging is designed to be reused for the presentation of goods. This is packaging primarily designed to be re-used for the presentation of goods to a consumer or user and have been permanently set aside for this purpose, before or as soon as they have been manufactured or imported.
- sales display shelf
- shop fittings
- sales presentation stand
3.4 Transport packaging on imported goods
Plastic Packaging Tax is not charged on transport packaging used in the delivery of goods into the UK.
Transport packaging is either:
- packaging that is used to handle and transport a number of sales units or grouped packaging, to prevent physical handling and transport damage
- road, rail, ship and air containers
This means that packaging used to secure the safe transit of products on import to the UK will not be chargeable for the tax. For example, pallet wrap to secure consignments of products to pallets.
Plastic packaging used only to transport goods within the UK will be chargeable for the tax, as will unfilled transport plastic packaging imported as an item in its own right.
3.5 Plastic packaging for a medicinal product
Plastic Packaging Tax is not charged on plastic packaging manufactured or imported for use in the immediate packaging of a medicinal product.
The definition of a medicinal product is either any substance or combination of substances:
- presented as having properties of preventing or treating disease in human beings
- that may be used by or administered to human beings with a view to restoring, correcting or modifying a physiological function by exerting a pharmacological, immunological or metabolic action, or making a medical diagnosis
Find more information about medicinal products in Regulation 2 of the Human Medicines Regulations 2012. ‘Immediate packaging’ is the container or other form of packaging immediately in contact with the medicinal product.
3.6 Packaging used in aircraft, ship and rail goods stores
Plastic Packaging Tax is not charged on packaging products that are used in aircraft, ship or railway stores for international journeys.
If the plastic packaging is subsequently imported (removed from stores and released into the UK) the import will have to be recorded, along with the weight and recycled content of the packaging.
You can find more information about what are classed as stores for this purpose in the Customs and Excise Management Act 1979 Section 1.
3.7 Packaging components permanently designated for a use other than packaging
Plastic Packaging Tax is not charged on packaging components permanently designated or set aside for a use other than packaging before, or as soon as, they have been produced or imported.
This is provided they are for use other than for the containment, protection, handling, delivery or presentation of goods (whether that use is before or after sale to a consumer) and the manufacturer or importer keeps a record of that designation or setting aside.
4. Plastic Packaging which is exported from the UK
Where plastic packaging is intended for export, payment of the tax can be deferred for up to 12 months as long as certain requirements known as the ‘direct export condition’ are met.
If the packaging is exported within the 12-month period, the liability for Plastic Packaging Tax is cancelled.
If you have accounted for Plastic Packaging Tax on packaging that was intended for the UK when it was manufactured or imported, but is subsequently exported from the UK, you can claim a tax credit.
To receive a tax credit, you must hold records demonstrating that the export has taken place.
More guidance on the criteria that will need to be met to satisfy the direct export condition will be published along with regulations, later in the year.
If the direct export condition is not met, Plastic Packaging Tax will become due on the packaging from the date when the condition was no longer met. For example, the date when the packaging was no longer intended for export, or the 12 month deferral period, has elapsed – whichever is the sooner.
5. About registration
You must register for Plastic Packaging Tax if you manufacture or import 10 or more tonnes of plastic packaging over a 12 month period, even if all the packaging you manufacture, or import contains 30% or more recycled plastic.
The tax comes into effect on 1 April 2022 and you must tell us that you are liable to register by 30 April 2022. We will provide more information about how to do this later in the year.
You must include all plastic packaging manufactured or imported, including packaging:
- used in the immediate packaging of a medicinal product
- components that are permanently designated or set aside for use other than a packaging use
- containing 30% or more recycled plastic content when calculating whether you manufacture or import 10 or more tonnes of plastic packaging
5.1 Businesses that must notify liability to register
You must notify your liability to register for Plastic Packaging Tax if your business meets either of the following conditions:
- at any time after 1 April 2022 you expect to manufacture or import 10 tonnes or more of plastic packaging in the following 30 days — you must notify your liability to register within 30 days of the first day that this condition is met, for example:
- on 15 July you accept an order to manufacture 15 tonnes of plastic packaging by 31 July – you would be liable to be registered for the tax from 15 July and would need to notify your liability to register before 14 August
- you have manufactured or imported 10 tonnes or more of plastic packaging in a 12 month period ending on the last day of a calendar month — you become liable for Plastic Packaging Tax from the first day of the next month and must notify your liability to register by the first day of the subsequent month, for example:
- if you go over the 10 tonne or more threshold during December, you become liable from 1 January and must notify your liability to register before 31 January
There are special arrangements for the second condition in the first year after Plastic Packaging Tax takes effect from 1 April 2022.Under the second condition, a business only needs to register for the tax when the amount of plastic packaging is 10 tonnes or more in a 12 month period from 1 April 2022.
For example, if you manufacture 5 tonnes of plastic packaging in each of January, February, March, April, and May 2022, you will only need to register for packaging manufactured in April and May.
Imports of plastic packaging which have not cleared customs or are not in free circulation should not be included in any calculation. Businesses based outside of the UK must be registered for and pay the tax if they import plastic packaging into the UK.
Plastic packaging which contains at least 30% recycled plastic or are exempt from the tax for other reasons must still be included in working out if a business must register for the tax.
5.2 Group registration
Businesses who are members of a group of companies and want to simplify the administration and payment of Plastic Packaging Tax will be able to appoint a representative member of the group to submit returns and pay the tax for the whole group.
More details about this will be published later this year.
6. Record keeping
All businesses that manufacture or import plastic packaging must keep a record of the packaging they manufacture or import.
Records should be kept of plastic packaging that you manufacture or import even if you do not need to notify your liability to register for the tax.
This is so you can demonstrate to HMRC that you do not need to notify your liability to register and to help you understand when you may become liable to notify to register or pay the tax.
The records should show the:
- total amount in weight and a breakdown by weight of the materials used to manufacture plastic packaging, excluding packaging which is used to transport imported goods
- data and calculations used to determine if a packaging component is, for the most part plastic, and how much recycled plastic it contains
- weight of exempted plastic packaging and the reason for the exemption
- amount in weight of plastic packaging exported, and therefore the allowed relief from the tax
6.1 Records for imported plastic packaging
For imported plastic packaging, details of its recycled plastic content must be obtained from the overseas manufacturer by the liable business in the UK.
The liable business will be the importer. This will generally be the consignee on the importation documents, unless they can demonstrate that they are acting on behalf of someone who is controlling the import and using the consignee to store goods on their behalf.
Records must be kept by the importer to ensure compliance with the tax.
6.2 Records for plastic packaging not chargeable or relieved from the tax
You must keep records if you manufacture or import plastic packaging that is exempt from the tax, including the weight of the packaging and the exemption which applies.
Plastic packaging used in the immediate packaging of a medicinal product
You will need to keep records to support that this packaging is exempt from the tax.
Records you use could be specific, for example an order form setting out the specification and showing it is for the immediate packaging of medicinal products, or a combination of records described in the table.
Plastic packaging which is intended for export from the UK
You must keep records showing the export took place within 12 months from the date the packaging was manufactured.
If there is a change of intention and the packaging is not exported and is diverted onto the UK market, the tax will be chargeable and need to be accounted for.
If this happens, you must keep records relating to the original intention to export the packaging as evidence for the delay in accounting for the tax and that the 12 month deferral period has not been breached.
If you have already accounted for tax on packaging that is subsequently exported, you can claim a tax credit.
You must hold records of the export, weight and recycled plastic content of the packaging and if available, you should keep a record of the supply chain used when the export took place.
If you are the exporter of the plastic packaging, you should keep records of the export so that the manufacturer or importer who accounted for the tax can claim a tax credit.
6.3 Records that may be used to show the weight and recycled plastic content
The following examples show documents you can keep to demonstrate the weight and recycled plastic content of packaging to HMRC.
These are examples and other documents may be used along with or in place of those listed to demonstrate the weight and recycled plastic content of plastic packaging.
|Document to keep as a record||Area to evidence|
|Product specification.||Proportion of recycled plastic.
Weight of packaging.
Whether it is, for the most part, plastic.
Exempt from the tax.
|Contracts.||Quantity of plastic packaging.
Proportion of recycled plastic.
Weight of the packaging.
Whether it is, for the most part, plastic.
Whether it is exempt from the tax.
|Production certificates and certificates of conformity.||Proportion of recycled plastic in the packaging.|
|Business accounting systems||Recycled plastic through the manufacturing process|
|Accreditations and international standards.||Accreditation bodies such as the International Organization for Standardization (ISO) or the British Retail Consortium (BRC) use a number of standards. We recognise that some international standards require businesses to be able to trace the level of recycled plastic in their packaging. This could help evidence the proportion and source of recycled plastic, weight of the packaging, whether it is, for the most part, plastic, or is exempt from the tax.|
|Quality assurance audits.||Quality assurance audits (either internally or by reputable third-parties) can demonstrate the level of recycled plastic and the weight of the packaging. This could also help evidence whether packaging is for the most part plastic, or if it is exempt from the tax.|
|Sales and purchase invoices.||Invoices may reflect the quantities of the packaging supplied, weight of the waste, recycled plastic feedstock, date of sale and tax paid by the taxable person. The date of sale could help evidence the date the packaging is imported or manufactured.|
|Environmental Agency and such like accreditation and equivalent approvals from other bodies.||Businesses can obtain permits or exemptions for reprocessing waste to create recycled material from the Environment Agency, Natural Resources Wales, the Northern Ireland Environment Agency and the Scottish Environmental Protection Agency. Where reprocessors of waste claim a credit note under the Packaging Recovery Note scheme, they are required to register with the relevant environmental protection agency. Businesses who manufacture plastic packaging could check that the recycled plastic comes from a registered reprocessor. This could help to evidence the source of recycled plastic in the packaging. There are equivalent international accrediting bodies who may be used by imports of recycled plastic, these will be considered on a case-by-case basis. However, the accreditors will not have an active role in assuring the tax.|
For imported packaging, you will need to provide evidence from the manufacturer of the packaging, or evidence that you or a competent third-party has a robust supply chain audit. This could include any of the examples in the table.
6.4 Plastic packaging which is later converted into a different packaging component
You can claim a tax credit for plastic packaging components that you have accounted for and are subsequently converted into a different packaging component on which the tax is also accounted for. This is to prevent the tax being charged twice on the same packaging.
To receive a credit, you must hold records to demonstrate the conversion of the original packaging and the evidence of the tax being accounted for by the converter.
7. Further help and support
More detailed guidance will be published later in the year in advance of the introduction of the tax in April 2022.
If you have any queries about the content of this guidance, or want to receive regular updates from HMRC about Plastic Packaging Tax, email: firstname.lastname@example.org.